- 8 - amount, we are generally permitted to estimate the deductible amount. Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930). To apply the Cohan rule, the Court must have a reasonable basis upon which an estimate can be made. Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985). Without such a basis, any allowance would amount to unguided largesse. Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957). However, the strict rules of substantiation that apply to certain business deductions described in section 274(d) supersede the rule in Cohan v. Commissioner, supra at 544. Sanford v. Commissioner, 50 T.C. 823, 827-828 (1968), affd. per curiam 412 F.2d 201 (2d Cir. 1969); Keating v. Commissioner, T.C. Memo. 1995-101; Jeffers v. Commissioner, T.C. Memo. 1986-285; sec. 1.274-5T(a)(4), Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6, 1985). Petitioner did not provide any receipts or any other evidence to establish when the computers, monitors, and fax machine were purchased, or the cost of the items. Petitioner testified that the amount he claimed on his Schedule C for the computers and peripheral equipment was “a little over-inflated” and that one of the computers was not even purchased in the tax year in issue. There is insufficient evidence to establish that these items were purchased during the year in issue, or to substantiate the cost. Accordingly, petitioner is not entitled to a deduction for his computers, monitors, and fax machine.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 NextLast modified: November 10, 2007